Government assures solution for aviation sector problems

Civil Aviation Minister Ashok Gajapathi Raju on Tuesday assured aviation industry that the government will take every step to help them in resolving issues faced by the sector.

Calling for speedy solutions during a pre-budget interaction meet, he acknowledged that air travel has a multiplier effect on the economy and, therefore, decisions should be made to allow the civil aviation sector to grow to its full potential.

“The different wings of the government would come together to find solutions for the problems faced by the industry today,” he said adding that such interactions help the ministry identify challenges posed to the growth of the sector and, at the same time, find ways to address those challenges.

Issues regarding upgradation of standards for security equipment, establishment of a ‘green’ maintenance, repair and overhaul (MRO) equipment, and allocation of appropriate funds for air navigation facilities, were discussed.

The industry representatives made several suggestions for the promotion of MRO sector, including removal of service tax, reducing VAT on MRO activities, ten-year tax holiday and abolition of central excise duty on MRO component, an official statement said.

If these measures are taken, the representatives said, there would be creation of one lakh jobs with more than a billion dollar revenues to the country on account of MRO activities.

They also raised the issue of treating ATF as a ‘declared good’ so that VAT on ATF could be reduced to 4 per cent. This would make airlines more viable as ATF constitutes more than 45 per cent of the cost, they argued.

The airlines representatives requested that they should be given the infrastructure status to enable access to funds with lower rate of interest through external commercial borrowings.